JOHANNESBURG - South Africa's AngloGold Ashanti said on Tuesday it had agreed to buy all the outstanding shares of Canadian bullion miner Corvus Gold as it seeks to expand its ore reserves.
The acquisition will be an all-cash deal and at a premium of 55% to the market price of 2.58 Canadian dollar ($2.06) of Corvus as of May 5, AngloGold said. Corvus said it would shortly release a statement.
Corvus's current market price is 3.27 Canadian dollars and AngloGold has offered a price of 4 Canadian dollars for each of its shares, valuing Corvus at just over 500 million Canadian dollars.
Corvus Gold is the owner of a sizeable land package in the Beatty District in the U.S. state of Nevada with areas contiguous to AngloGold's Silicon, Transvaal and Rhyolite exploration assets, bank RBC said in a report.
AngloGold said the acquisition further consolidates one of the largest new gold districts in Nevada, and provides the opportunity for AngloGold to establish, in the medium and longer term, a meaningful, low-cost, long-life production base in a premier mining jurisdiction.
"The proposal is fully-aligned to our strategy of growing ore reserve, building low-cost production and generating sustainable returns," Christine Ramon, AngloGold Ashanti’s Interim Chief Executive Officer, said in a statement.
REUTERS